Question

Goodwill of the firm on the basis of 2 years' purchase of average profit of the
last 3 years is Rs. 60,000. Find average profit. *

Choose option with explanation..

A. Rs. 10,000

B. Rs. 20,000

C. Rs. 15,000

D. Rs. 25000

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Answer 1

average profit = total profit/number of relevant years

average profit =60000/3=20000